Giving Due Process Due Diligence: Cybersquatting and In Rem … · Cybersquatting Consumer Protection Act Andrew J. Grotto* INTRODUCTION If the diminishing quantity of internet jargon

* J.D. candidate (2003), University of California at Berkeley School of Law (Boalt Hall);M.P.P. candidate (2003), John F. Kennedy School of Government, Harvard University.Special thanks to Professor Pamela Samuelson of Boalt Hall for her comments and insights,and to Michael Lysobey and Stan Karas for reading drafts. I dedicate this article to myparents.

1 See, e.g., United States v. Morris, 928 F.2d 504, 505 (2d Cir. 1991).

2 See, e.g., Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1318 (9th Cir. 1998).

3 The challenges associated with internet jurisdiction extend well beyond the domain namecontext. See, e.g., David R. Johnson & David Post, Law and Borders—The Rise of the Lawin Cyberspace, 48 STAN. L. REV. 1367 (1996); Joel P. Trachtman, Cyberspace, Sovereignty,Jurisdiction, and Modernism, 5 IND. J. GLOBAL LEGAL STUD. 561 (1998).

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Due Process and In Rem Jurisdiction Under the Anti-Cybersquatting Consumer Protection Act

Andrew J. Grotto*

INTRODUCTION

If the diminishing quantity of internet jargon that courts enclosein quotation marks is an indication of their growing internet-savvy, thenrec ent years have borne substantial progress: the internet is no longer“the internet,” virus is no longer “virus,” and domain name is no longer“domain name.” Recent decisions involving domain name disputes,notwithstanding their dearth of quotation marks, have underscored thedifficulties endemic to jurisdiction over internet conduct, since the non-geocentric nature of the property interest complicates the minimumcontacts and state sovereignty analyses traditionally used to evaluate dueprocess. Recognizing the instability abiding in the law’s application to

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4 The internet has spawned confusion and uncertainty elsewhere in intellectual property law.See, e.g., Johnson & Post, supra note 3; Jeffrey J. Look, The Virtual Wild, Wild West(WWW): Intellectual Property Issues in Cyberspace—Trademark s, Service Marks,Copyrights, and Domain Names, 22 U. ARK. LITTLE ROCK L. REV 49 (1999). Forcommentary on the relationship between domain names and trademarks, see Jessica Litman,The DNS Wars: Trademarks and the Internet Domain Name System , 4 J. SMALL &EMERGING BUS. L. 149 (2000). For a more general discussion of trademarks in the internetcontext, see Sally Abel, Trademark Issues in Cyberspace: The Brave New Frontier, 5 M ICH.TELECOMM. TECH . L. REV. 91 (1998-1999).

5 For example, Congress has twice targeted purveyors of internet smut using traditionalobscenity doctrine. See generally Reno v. ACLU, 521 U.S. 844 (1997) (striking down theCommunications Decency Act of 1996, 47 U.S.C. § 223 (1996), on First Amendmentgrounds); ACLU v. Reno, 217 F.3d 162 (3rd Cir. 2000) (issuing preliminary injunction toprohibit enforcement of the Child Online Protection Act, 47 U.S.C. § 231 (1998)). Courtshave likewise applied tort principles such as libel, see, e.g., Bochan v. LaFontaine, 68F.Supp.2d 692 (E.D. Va. 1999); defamation, see, e.g., Blumenthal v. Drudge, 992 F.Supp.44 (D.D.C. 1998); and trespass to chattels, see, e.g., Intel Corp. v. Hamidi, 1999 WL 450944(Cal. Sup. Ct. Apr. 28, 1999). See also eBay, Inc. v. Bidder’s Edge, 100 F.Supp.2d 1058(N.D. Cal. 2000). Federal criminal law has also been readily used to combat illicit conducttaking place online. See, e.g., United States v. Thomas, 74 F.3d 701 (6th Cir. 1996). Someof these applications, however, have been criticized. For a critique of applying trespass tochattels to internet activity, see Dan Burk, The Trouble With Trespass, 4 J. SMALL &EMERGING BUS. L. 27.

6 The Anti-Cybersquatting Consumer Protection Act (hereinafter ACPA) § 43(d), 15 U.S.C.§ 1125(d) (1999).

7 A fascinating debate has arisen amongst lawyers and commentators over how best toapproach internet governance. One pole of the continuum regards the internet as generating“distinct doctrine, applicable to a clearly demarcated sphere, created primarily by legitimate,self-regulatory processes.” See, e.g., Johnson & Post, supra note 3, at 1400-1401. Thislibertarian view argues that existing legal doctrines—from jurisdiction to intellectualproperty to torts to criminal law—cannot capture the novel activities taking place online.Cyberspace simply falls outside the sphere of traditional legal analyses. Rather than try torope in the internet using traditional legal categories, the internet should evolve free of

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internet jurisdiction, and internet conduct more generally, Congress andthe courts have endeavored to bring the internet within the ken of extantlegal categories. The trademark dilution-based remedies afforded by1999’s Anti-Cybersquatting Consumer Protection Act, are illustrative ofthis incorporative trend. Despite the ACPA’s stabilizing effect on


governmental interference, as the norms that arise within cyberspace are, or will be, bestsuited to its governance. See id. at 1400-1402; see also Henry H. Perritt, Jr., Jurisdictionin Cyberspace, 41 VILL. L. REV. 1 (1996). For a fascinating argument that government-freedevelopment of internet norms is a case study in Jürgen Habermas’s “discourse ethics,” seeA. Michael Froomkin, [email protected]: Towards a Critical Theory of Cyberspace(last modified Nov. 24, 1999) <http://www.discourse.net>.

At the other pole of the continuum are those who decry the manufacture of ahighly specialized branch of law dedicated to the internet. They argue that the law, in itscurrent form, is fully able to capture the nuances of online activities. Judge Easterbrookadmonished those attending the “Law of Cyberspace” conference at the University ofChicago in 1996 to “go home,” as there is no “Law of Cyberspace” anymore than there isa “Law of the Horse.“ See Lawrence Lessig, The Law of the Horse: What Cyberspace MightTeach, 113 HARV. L. REV. 501 (1999)(commenting on Frank H. Easterbrook, Cyberspaceand the Law of the Horse, 1996 U. CHI. LEGAL F. 207 (1996)). According to these views,the “dilettantes” engaged in developing the “Law of Cyberspace” miss the point: the law ismore about developing general rules than it is fabricating narrow rules designed for narrowapplications. See, e.g., Easterbrook, supra. For a less pessimistic and dismissive view, seeRichard A. Posner, Antitrust in the New Economy (visited Dec. 1, 2000)<http://www.techlawjournal.com/atr/20000914posner.asp>(arguing that internet ventures,along with other new economy enterprises, pose formidable challenges for antitrust that arebest addressed by changing the institutional structures behind antitrust law).

A third group straddles the debate and borrows insights from both poles.Proponents of this incorporative view acknowledge the unique legal challenges posed by theinternet, and are skeptical that the internet can be wholly subsumed under, and analyzed inlight of, existing doctrine. On the other hand, these commentators recognize the need forsome measure of state regulation, and question the libertarian view that effective,authoritative norms can be distilled from the increasingly pluralistic internet. See, e.g., MarkLemley, The Law and Economics of Internet Norms, 73 CHI-KENT L. REV. 1257 (1998);Margaret Jane Radin, Property Evolving in Cyberspace, 15 J.L. & COM. 509, 515-516(1996); Margaret Jane Radin & R. Polk Wagner, The Myth of Private Ordering:Rediscovering Legal Realism in Cyberspace, 73 CHI.-KENT L. REV. 1295 (1998). Indeed,one commentator has convincingly argued that the set of norms that would spring from awholly self-governed internet would offend liberal conceptions of democracy and law. SeeNeil Weinstock Netanel, Cyberspace Self-Governance: A Skeptical View From LiberalDemocratic Theory, 88 CALIF. L. REV. 395 (2000). Many of these scholars conclude thattraditional legal doctrine, with some tweaking here and there, is best suited to the uniquelegal challenges posed by the internet. Congress and the courts have adopted theincorporative approach, see supra text accompanying note 6, a pursuit I attempt to furtherby this writing.

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domain name disputes, however, the statute contains in rem jurisdiction


8 Caesar’s World, Inc. v. Caesars-Palace.com, 112 F.Supp.2d. 502 (E.D. Va. 2000).

9 Id. at 504.

10 Courts have rejected the challenge that domain names cannot stand as a res: “[e]ven if adomain name is no more than data, Congress can make data property,” as it did in theenactment of the ACPA. Caesar’s World, 112 F.Supp.2d at 504; accord LucentTechnologies, Inc. v. Lucentsucks.com, 95 F.Supp.2d 528, 535 (E.D. Va. 2000). Moreover,it is well-settled that intangible property can stand as a res. See, e.g., Harris v. Balk, 198U.S. 215 (1905). Outside the ACPA in rem context, however, the status of the propertyinterest is less settled. See generally Network Solutions, Inc. v. Umbro Int’l, Inc., 529S.E.2d 80 (Va. 2000) (holding that domain names arise out of a contractual arrangementbetween the domain name registrar and the registrant, and consequently that domain namescannot be subject to garnishment).

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provisions that raise a novel constitutional due process concern: is thestatutory “presence” of a domain name within a jurisdiction sufficient toconfer to courts in that forum authority over the status of the domainname? The court in Caesar’s World, Inc. v. Caesars-Palace.com saidyes, and upheld the ACPA in rem provisions accordingly. However,little reasoning was offered for this holding beyond the bare assertionthat mere domain name registration suffices to establish in remjurisdiction. This article seeks to strengthen the argument for upholdingthe ACPA in rem provisions, and thereby to lend further stability tocybersquatting jurisprudence.

The notion that domain names embody a property interestcapable of standing as a res for in rem jurisdiction is quite novel, andcaselaw is far from lucid on the extent of minimum contacts required tosatisfy due process outside the internet context—let alone what such astandard should look like in cybersquatting cases. Accordingly, courtsscrutinizing the ACPA’s in rem provisions should stick close to theactual language and the practical effect of the provisions oncybersquatters’ rights, taking into account the unique nature of the injurysought to be remedied. This article therefore confines its due processanalysis to the in rem provisions contained in the ACPA, and leaves openthe broader, more intractable question of whether in rem jurisdiction,divorced from the manner in which it operates under a specific set of


11 Shaffer v. Heitner, 433 U.S. 186 (1977).

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circumstances, requires the same level of minimum contacts as personaljurisdiction. This article proposes a relaxed minimum contacts standardfor in rem jurisdiction as it applies narrowly to the ACPA, primarily onthe basis of a pair of procedural safeguards contained in the in remprovisions. This article argues that additional contacts supplied bycertain indicia of bad faith further support the constitutionality of theprovisions.

Part I contextualizes this discussion by detailing thecircumstances and concerns that led to the ACPA’s enactment. It thendescribes the due process quagmire posed by recent cases decided underthe ACPA, namely that mere domain name registration is insufficient toestablish personal jurisdiction. Part II analyzes the ACPA’s in remprovisions, and frames the discussion with a brief doctrinal overview ofin rem jurisdiction by locating the ACPA in rem provisions within thebroader debate over whether all assertions of jurisdiction (whether inpersonam or in rem) require the same showing of minimum contacts.Part III argues that to the extent due process may require more than themere presence of property to confer jurisdiction, the conventional quasiin rem/in rem distinction remains a salient and prominent feature in thecaselaw, although the distinction has blurred since the landmark caseShaffer v. Heitner. Part III then proceeds to argue that the ACPAcontains certain procedural safeguards, akin to policies that underlie inrem jurisdiction in maritime law, that provide the framework for arelaxed minimum contacts standard for the ACPA in rem provisions.Part IV suggests that certain indicia of bad faith supply additionalcontacts that complement the ACPA’s procedural safeguards and buttressthe relaxed minimum contacts standard proposed in Part III. It alsoaddresses the limitations of using the bad faith element to supplyminimum contacts.

I.THE ANTI-CYBERSQUATTING CONSUMER PROTECTION ACT AND DUE

PROCESS


12 See, e.g., Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1326 (9th Cir. 1998).

13 Lanham Act, 15 U.S.C. §§ 1051 et seq. (1946), amended by ACPA § 43(d), 15 U.S.C. §1125(d) (1999).

14 BroadBridge Media, LLC v. Hypercd.com, 106 F.Supp.2d 505, 512 (S.D.N.Y. 2000).

15 Id. at 511 (quoting H.R. Conf. Rep. No. 106-412 (1999)). The court in BroadBridge wenton the conclude “the bill does not extend to innocent domain name registrationsby….someone who is aware of the trademark status of the domain name but registers adomain name containing the mark for any reason other than with bad faith intent to profitfrom the goodwill associated with that mark.” Another court noted “ACPA was notdesigned to combat domain name registrants utterly ignorant of certain existing trademarks,or those registrants with a good faith reason to believe that they have the right to registerdomain names.” Harrods Ltd. v. Sixty Internet Domain Names, 110 F.Supp.2d 420, 426(E.D. Va. 2000).

16 ACPA § 43(d)(B)(ii) (“Bad faith intent….shall not be found in any case in which thecourt determines that the person believed and had reasonable grounds to believe that the useof the domain name was a fair use or otherwise lawful.”).

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Cybersquatting does not fall neatly under the traditionalcategories of trademark dilution: “blurring” and “tarnishment.” Prior tothe ACPA, courts had little statutory or precedential guidance on how toadjudicate cybersquatting claims, and were thus left to fashion ad hocremedies. The ACPA carves a space within the Lanham Act fortrademark holders to eject bad faith cybersquatters off infringing domainnames, outfitting trademark holders with “inexpensive and effective legalremedies” to police their marks. The bad faith element is key, for thestatute is applicable only to those who “used the offending domain namewith bad-faith intent to profit from the goodwill of a mark belonging tosomeone else.” The ACPA does not provide a cause of action when theaccused cybersquatter registered and uses the domain name in good faith.

More controversially, the ACPA contains narrow in remjurisdiction provisions whereby the domain name stands as the res, andthe situs is deemed to be the jurisdiction hosting the domain name


17 Id. § 43(d)(2).

18 Id. § 43(d)(2)(A)(ii)(I), (II).

19 Porsche Cars of North America v. Porsche.com, 51 F.Supp.2d 707 (E.D. Va. 1999). Asone court noted, “[a]t least in part, Congressional concern for the Due Process rights ofdomain name registrants was inspired by this court’s decision in Porsche Cars.” LucentTechnologies, Inc. v. Lucentsucks.com, 95 F.Supp.2d 528, 534 (E.D. Va. 2000).Representatives of Porsche Cars testified before Congress on the difficulties theyencountered in policing use of the their trademarks in domain names. See Thomas R. Lee,In Rem Jurisdiction in Cyberspace, 75 WASH . L. REV. 97, 107-109 (2000) (written prior toenactment of ACPA).

20 Examples included, inter alia, <porsh.com>, <porscheweb.com>, and <porsche911.com>.

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registrar used by the alleged cybersquatter. Notably, in rem jurisdictionunder the ACPA is only available when either the trademark holdercannot acquire in personam jurisdiction over the defendant, or thetrademark holder is unable to ascertain who ought to be the properdefendant. Cybersquatting cases, founded on these in rem jurisdictionprovisions, have since beset federal courts in the Eastern District ofVirginia, host jurisdiction to Network Solutions, Inc. (NSI), and otherjurisdictions hosting domain name registrars. Cybersquattingjurisprudence has developed rapidly in the wake of the ACPA, astrademark holders have clamored to take advantage of its remedies.

A. Circumstances Behind ACPA Enactment

The in rem provisions contained in the ACPA are in partialreaction to the situation that faced the plaintiff in Porsche Cars of NorthAmerica v. Porsche.com. Plaintiff Porsche Cars found that dozens ofdomain names incorporated various permutations of its trademarks.Porsche Cars was faced with the daunting prospect of litigating againsteach of the dozens of infringing domain name registrants in countlessjurisdictions. To skirt the behemoth cost such a course of action wouldentail, Porsche Cars brought a trademark dilution suit against this farragoof domain names in the Eastern District of Virginia on a theory of in rem


21 See Lee, supra note 19, at 108-109.

22 51 F.Supp.2d at 711.

23 Id.

24 Id.

25 Shaffer v. Heitner, 433 U.S. 186 (1977).

26 A different challenge, unrelated to the in rem provision per se, poses a First Amendmentconcern relating to parody and fair use of domain names. See, e.g., Lucent Technologies,Inc. v. Lucentsucks.com, 95 F.Supp.2d 528 (E.D. Va. 2000). First Amendment concerns arenot the focus of my analysis, so I shall say no more about them. For a recent non-ACPAappellate opinion on this issue in the domain name context, see CPC Int’l Inc. v. Skippy Inc.,214 F.3d 456 (4th Cir. 2000). For some cautionary remarks on the importance ofmaintaining a balance between trademarks, unfair competition and free speech, see MarkA. Lemley, The Modern Lanham Act and the Death of Common Sense, 108 YALE L.J. 1687,1710-1711 (1999). First Amendment concerns have risen frequently in the internet context.See, e.g., ACLU v. Reno, 217 F.3d 162 (3rd Cir. 2000) (granting preliminary injunctionagainst enforcement of the Child Online Protection Act, 47 U.S.C. § 231 (1998), on groundsthat it more likely imposes an unconstitutional burden on First Amendment free speech).For a discussion of filtering software in libraries and First Amendment free speech, see MarkS. Nadel, The First Amendment’s Limitations on the Use of Internet in Public and SchoolLibraries: What Content Can Librarians Exclude?, 78 TEXAS L. REV. 1117 (2000). See alsoMatthew Thomas Kline, Mainstream Loudoun v. Board of Trustees of The Loudoun CountyLibrary, 14 BERKELEY TECH . L.J. 347 (1999). For a discussion of filtering technology, see

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jurisdiction, as opposed to an in personam suit against the domain nameregistrants. Porsche Cars argued that the domain names under dispute,registered by the Virginia-based Network Solutions, Inc. (NSI),constituted a res physically located in Virginia and therefore subject to inrem jurisdiction in the Eastern District of Virginia. The court rejectedPorsche Cars’ theory, reasoning, “the language of the TrademarkDilution Act does not appear to permit in rem actions against allegedlydiluting marks.” In addition, the court worried that “a contrary readingof the statute would unnecessarily put its constitutionality in doubt”under the Supreme Court’s ruling in Shaffer v. Heitner. The ACPAundoubtedly salves the former concern, but the latter may prove moreobstinate.


Jonathan Weinberg, Rating the Net, 19 HASTINGS COMM. & ENT. L.J. 453 (1997).

27 International Shoe Co. v. Washington, 326 U.S. 310 (1945).

28 Burnham v. Superior Court of California, 495 U.S. 604 (1990).

29 Caesars World, Inc. v. Caesars-Palace.com, 112 F.Supp.2d 502 (E.D. Va. 2000).

30 Id. at 504

31 Id.

32 Id.

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B. The Jurisdictional Quagmire

In Shaffer, the Supreme Court found that assertions of quasi inrem jurisdiction must be accompanied by a showing of minimumcontacts equivalent to those necessary for personal jurisdiction underInternational Shoe Co. v. Washington. In a decision subsequent toShaffer, Burnham v. Superior Court of California, the Court split onwhether all assertions of jurisdiction, including both in rem and quasi inrem, must meet the minimum contacts standard for personal jurisdiction.The first decision to uphold the constitutionality of the ACPA in remprovisions was Caesars World, Inc. v. Caesars-Palace.com. In CaesarsWorld, the defendant argued that “under Shaffer v. Heitner, in remjurisdiction is only constitutional in those circumstances where the resprovides minimum contacts sufficient for in personam jurisdiction.” Thecourt squarely rejected this reading, holding instead that Shaffer requires“minimum contacts to support personal jurisdiction only in those in remproceedings where the underlying cause of action is unrelated to theproperty which is located in the forum state.” For cybersquatting casesbrought in rem under the ACPA, the domain name that constitutes the resis the underlying cause of action, so “it is unnecessary for minimumcontacts to meet personal jurisdiction standards.” The court stated,


33 Id.

34 See Thomas R. Lee, In Rem Jurisdiction in Cyberspace, 75 WASH . L. REV. 97, 118 (2000)(written prior to enactment of ACPA).

35 Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998)(citing Cybersell,Inc. v. Cybersell, Inc., 130 F.3d 414, 418 (9th Cir. 1997)).

36 Heathmount A.E. Corp. v. Technodome.com, 106 F.Supp.2d 860 (E.D. Va. 2000).

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without supporting citations, that in rem jurisdiction does not require thelevel of minimum contacts necessary to establish personal jurisdiction.The court added, “[t]o the extent that minimum contacts are required forin rem jurisdiction under Shaffer….domain name registration” suffices.

The court in Caesar’s World offered no substantive argument forits reading of Shaffer. This is puzzling, because it is not at all apparenthow Shaffer and Burnham apply to domain name disputes. In rem isused most often in civil forfeiture or admiralty proceedings, so case lawis largely inapposite. This dearth of support does little to fend off thedue process challenge and would appear to leave the court’s rulingvulnerable.

To complicate matters, the Ninth Circuit in PanavisionInternational, L.P. v. Toeppen, a non-ACPA case, has held that domainname registration alone does not satisfy minimum contacts for personaljurisdiction. The Eastern District of Virginia has since ruled identicallyin a case brought in rem under the ACPA. The quagmire is this: afinding that in rem jurisdiction requires a level of minimum contactscommensurate to those required for in personam suits would invalidatethe in rem provisions of the ACPA, because domain name registrationalone, at least according to the decisions rendered so far, is insufficient toestablish personal jurisdiction. This would gut much of the impetus forthe ACPA, as cybersquatters who register anonymously or resideoverseas would be immune to suit in U.S. courts. As we shall see in PartII below, however, courts have readily used the in rem provisions to


37 Pennoyer v. Neff, 95 U.S. 714 (1877). For an interesting discussion concerning thefactual background of Pennoyer , see Wendy Purdue, Sin, Scandal, and Substantive DueProcess: Personal Jurisdiction and Pennoyer Reconsidered, 62 WASH . L. REV. 479, 481-489(1987).

38 Lee, supra note 34, at 118. 39 Shaffer v. Heitner, 433 U.S. 186, 199 (1977); accord Harris v. Balk, 198 U.S. 215 (1905),discussed in Shaffer, 433 U.S. at 200.

40 For example, courts would sometimes assume that a non-resident defendantconstructively appointed a “state official as his agent to accept process.” Shaffer, 433 U.S.at 202 (citing Hess v. Pawloski, 274 U.S. 352 (1927) (upholding state law according towhich intrastate motorists constructively appoint a state official to accept process)); St. Clairv. Cox, 106 U.S. 350 (1916) (upholding state law requiring corporations seeking to dobusiness within state to appoint in-state agent for receiving process).

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subject a class of these cybersquatters—namely those that exhibit badfaith—to jurisdiction in their court, but they have done so only when theplaintiff could not otherwise acquire personal jurisdiction over thecybersquatter anywhere in the United States or the plaintiff could not,after exercising due diligence, ascertain who ought to be the defendant.

II. IN REM JURISDICTION AND THE ACPA

A. In Rem Jurisdiction Past

With historical roots in Pennoyer v. Neff, a decision handeddown in 1877, in rem jurisdiction enjoys “a long history in…. admiraltyand condemnation proceedings.” Pennoyer established the doctrine that“state authority to adjudicate was based on the jurisdiction’s power overeither persons or property,” which carried the simultaneous effect ofsharply limiting personal jurisdiction while endorsing expansive in remjurisdiction. As interstate contacts mushroomed with the advent ofmodern transportation and technologies, injuries were increasinglycaused by non-resident defendants who could not be served with process.To circumvent the formulaic holding of Pennoyer, courts devisedsurrogates for personal jurisdiction to remedy injuries meted out byperipatetic defendants. The strict dictum limiting the reach of personal


41 See, e.g., Burnham v. Superior Court of California, 495 U.S. 604 (1990).

42 Shaffer, 433 U.S. at 202.

43 International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), noted in Burnham, 495U.S. at 618.

44 International Shoe, 326 U.S. at 317; accord Intermeat Inc. v. American Poultry, Inc., 575F.2d 1017, 1021 (2d Cir. 1978).

45 See, e.g., Burnham, 495 U.S. at 630 (Brennan, J., concurring).

46 See, e.g., Caesar’s World, Inc. v. Caesars-Palace.com, 112 F.Supp.2d 502 (E.D. Va.2000).

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jurisdiction to sovereign territory began to relax, albeit in the form o f alegal fiction that “left the conceptual structure in Pennoyer” based onstate sovereignty intact. International Shoe abandoned the Pennoyertheory of personal jurisdiction by discarding this legal fiction andadopting the evolving but still extant “minimum contacts” test. Ratherthan focus on the mere presence of property, International Shoe demandsthat courts inquire into the defendant’s degree of contacts with the forumstate. International Shoe and its progeny thus called in to question thepropriety of states’ inviolate jurisdiction over property located withintheir borders, blurring the in rem/in personam distinction.

Assertions of in rem jurisdiction may be divided into twocategories. The first category, referred to simply as “in rem” jurisdiction,concerns an assertion of jurisdiction over a res where the res underliesthe claim. The second category, called “quasi in rem” jurisdiction,concerns claims where the plaintiff is either attempting to settle claims tothe property exclusively as to the parties involved in the lawsuit, orseeking to use the res as a means to satisfy a claim unrelated to the statusof the res. Suits brought in rem under the ACPA fall into the firstcategory, because the dispute is over the res itself.


47 See, e.g., Burnham, 495 U.S. at 620; Intermeat, Inc. v. American Poultry Inc., 575 F.2d1017, 1021 (2d Cir. 1978); Orient Overseas Container Line v. Kids Int’l Corp., 1998 WL531840, at *5 (S.D.N.Y. Aug. 24, 1998)(citing Cargill, Inc. v. Sabine Trading & ShippingCo., 756 F.2d 224, 228 n.2 (2d Cir.1985)).

48 Shaffer, 433 U.S. at 186.

49 Burnham, 495 U.S. at 621.

50 Id. Roughly, one might think of Justice Scalia’s argument as being that in remjurisdiction is to specific personal jurisdiction what quasi in rem jurisdiction is to generalpersonal jurisdiction.

51 Id. at 610-616. For a defense of Justice Scalia’s opinion and specifically his use ofhistory, see Earl M. Maltz, Personal Jurisdiction and Constitutional Theory—A Commenton Burnham v. Superior Court, 22 RUTGERS L.J. 689 (1991).

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B. In Rem Jurisdiction According to the Supreme Court: No Clear Rule

It is well-settled that Shaffer involved at least thec onstitutionality of quasi in rem jurisdiction. The Court was clear inShaffer that quasi in rem jurisdiction satisfies due process only to theextent that it satisfies personal jurisdiction according to InternationalShoe. What is not clear is whether the same standard applies to in remjurisdiction. In Burnham, Justice Scalia, declaring the judgment of thecourt and writing for Chief Justice Rehnquist and Justice Kennedy,argued that in rem jurisdiction was fully constitutional in cases involvinga dispute in which the property acting as the res was itself the subject ofthe dispute. According to Justice Scalia, Shaffer equates quasi in remjurisdiction to personal jurisdiction, and therefore requires only suitsbrought quasi in rem to comport with the minimum contacts analysis laidout in International Shoe. Justice Scalia relied heavily on a historicalunderstanding of due process to construct his argument, focusing on thestates’ historic right to adjudicate the status of property within theirborders.

Justice Brennan concurred in the judgment, joined by Justices


52 In his short concurrence Justice White, in response to Justice Scalia’s use of history,reminded the Court that they enjoy “the authority under the [14th] Amendment to examineeven traditionally accepted procedures and declare them invalid.” Burnham, 495 U.S. at 628(White, J., concurring). Justice Stevens also concurred in the judgment, but criticized thecourt for the “unnecessarily broad reach” of its arguments. Id. at 640 (Stevens, J.,concurring).

53 Id. at 629 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

54 Id. at 630.

55 Id.

56 Id. at 631; accord id. at 631-632 nn.4-6. For additional remarks on Burnham, see LindaA. Silberman, Reflections on Burnham v. Superior Court: Toward Presumptive Rules ofJurisdiction and Implications for Choice of Law, 22 RUTGERS L.J. 569 (1991). See alsoRobert Taylor-Manning, An Easy Case Makes Bad Law—Burnham v. Superior Court ofCalifornia, 66 WASH . L. REV. 623 (1991) (arguing that transient jurisdiction should beabolished in favor of the minimum contacts standard).

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Marshall, Blackmun, and O’Connor. Justice Brennan criticized JusticeScalia’s “reliance solely on historical pedigree,” arguing that the point ofanalysis should be whether “traditional notions of fair play andsubstantial justice” are flaunted, and not historical practice. According toJustice Brennan, “[t]he critical insight of Shaffer is that all rules ofjurisdiction, even ancient ones, must satisfy contemporary notions of dueprocess.” In other words, Shaffer applies not only to quasi in remjurisdiction, but to all forms of jurisdiction—including, it would seem, inrem jurisdiction. He continued, arguing that International Shoe andShaffer have been predominantly interpreted “to mean that everyassertion of state-court jurisdiction…must comport with contemporarynotions of due process,” a contention Justice Brennan supports with acatalog of citations from “lower courts, commentators, and the AmericanLaw Institute.”

C. In Rem Jurisdiction Present: The ACPA


57 As one court noted, “the permissible scope of personal jurisdiction on Internet use is inits infant stages.” Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1123 (W.D.Pa. 1997). The ACPA is approximately one year old at the time of this writing, so the sameseems to hold true for in rem jurisdiction on Internet use.

58 ACPA § 43(d)(2). The plaintiff need not “establish that the domain name violates therights of plaintiff before filing an in rem claim.” Caesar’s World, Inc. v. Caesars-Palace.com, 122 F.Supp.2d 502, 505 (E.D. Va. 2000). It is important to emphasize,however, that Congress’s proclamation that a domain name is a res with a situs applies onlyto a domain name designated as a defendant in an in rem suit, as the language establishingres and situs appears first and exclusively within the in rem provisions. See ACPA §§43(d)(2)(A) (establishing domain name as res for in rem suit), 43(d)(2)(C) (establishing situsof res).

59 Id. § 43(d)(2)(C).

60 Id. § 43(d)(2)(D)(i).

61 Id. § 43(d)(2)(A)(ii)(I).

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Enter the ACPA and its novel in rem provisions. Section43(d)(2) provides mark holders with a narrowly defined in rem cause ofaction “against a domain name in the judicial district in which thedomain name registrar, domain name registry, or other domain nameauthority that registered or assigned the domain name” if the domainname was registered or used with the requisite bad faith intent to profit.The jurisdiction hosting the domain name registrar or domain nameauthority used by the alleged cybersquatter constitutes the situs of theres. Significantly, the sole remedies available in rem are “forfeiture orcancellation of the domain name or the transfer of the domain name tothe owner of the mark.”

The in rem action is available in only two circumstances. First,under subpart (I), a mark holder may bring an in rem suit if personaljurisdiction cannot be acquired over the cybersquatter behind theoffending domain name. Courts have construed this requirement tomean that if personal jurisdiction is available anywhere in the UnitedStates, the general prohibition against in rem jurisdiction set forth by


62 See, e.g., Lucent Technologies, Inc. v. Lucentsucks.com, 95 F.Supp.2d 528, 534 (E.D.Va. 2000)(“Congress enacted [the in rem provisions of ACPA] to provide a last resort wherein personam jurisdiction is impossible….inspired by this court’s decision in Porsche Carsof North America”); Heathmount A.E. Corp. v. Technodome.com, 106 F.Supp.2d at 864 n.6(E.D. Va. 2000) (“To satisfy the absence of personal jurisdiction….a court must assesswhether personal jurisdiction exists in the forum state and also whether personal jurisdictionexists in any other states.”).

63 However, in personam jurisdiction cannot be based merely on an appearance in an in remaction. See Harrods Ltd. v. Sixty Internet Domain Names, 110 F.Supp.2d 420, 423 (E.D.Va. 2000).

64 Heathmount, 106 F.Supp.2d at 862 (citations omitted).

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Porsche Cars controls. Put differently, a plaintiff must affirmativelyestablish a lack of personal jurisdiction to proceed in rem. According tothe court in Heathmount, this:

places the Plaintiff and the Court in an awkwardrelationship. In an in personam proceeding, a plaintiffmust prove personal jurisdiction by a preponderance ofthe evidence. In such cases, a court will construe allrelevant allegations in the light most favorable to thePlaintiff and draw inferences in favor of jurisdiction.Subpart (I) of the in rem statute turns this analysis on itshead…. [requiring plaintiff to] “disprove” the presenceof personal jurisdiction in order to proceed in rem.


65 Id.

66 Id. at 863.

67 Id.

68 Lucent Tech., 95 F.Supp.2d at 534.

69 Heathmount, 106 F.Supp.2d at 863.

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In other words, under the normal rule for personal jurisdiction, an ACPAplaintiff “bear[s] the burden of proving the ‘absence’ of personaljurisdiction by a preponderance of the evidence,” which essentiallyinvolves “proving a negative.” However, plaintiffs seeking merely thetransfer of the disputed domain name and not any damages can save timeand expense by proceeding in rem, as the pursuit of suits brought inpersonam will generally be more costly due to the threat of potentialmonetary damages that might beset the defendant and the possibility oflitigating in multiple jurisdictions. Accordingly, there is “a disincentivefor plaintiffs to cull information that might establish the presence ofpersonal jurisdiction.” Given that the in rem provisions are not“intend[ed] to provide an easy way for trademark owners to proceed inrem after jumping through a few pro forma hoops,” the Heathmountcourt found that “a plaintiff’s burden to prove the ‘absence’ of personaljurisdiction in subpart (I) cases should mirror the burden imposed onplaintiffs proceeding under subpart (II).”


70 ACPA § 43(d)(2)(ii)(II).

71 Caesar’s World, Inc. v. Caesars-Palace.com, 112 F.Supp.2d 502, 505 (E.D. Va. 2000).

72 Lucent Tech., 95 F.Supp.2d at 530.

73 Id.

74 Id. at 532.

75 Id. (internal quotation marks omitted).

76 Id. at 533.

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Subpart (II) provides for an in rem suit if the mark holder cannot“through due diligence” identify who ought to be the proper defendant.This subpart captures those registrants who play “cat and mouse” andsubmit false or misleading contact information to the registrar, thusmaking it impossible to trace the true registrant.

In Lucent Technologies, the court elaborated on what constitutesdue diligence in this context. The plaintiff in Lucent Technologies triedto alert the alleged cybersquatter to the infringement by sending aFederal Express letter to the address listed in the registration agreement.The letter was returned. The alleged cybersquatter in LucentTechnologies had moved, but forgot to change the address listed in hisdomain name registration agreement. However, he did leave aforwarding address with the post office. Plaintiff successfully reachedthe alleged cybersquatter by first class mail, but nevertheless filed the inrem action just eight days after the first class mailing. The court foundthat “a waiting period of merely eight days does not demonstrate therequisite due diligence” to establish in rem jurisdiction under the ACPA.The court went on to suggest that ten days might be the minimum, butwas inconclusive, finding only that eight days was not enough.


77 Heathmount v. Technodome.com, 106 F.Supp.2d 860, 863 (E.D. Va. 2000). This broadgrant of discretion accords with the similarly broad discretion available in ascertaining badfaith intent to profit. See Part IV, infra.

78 ACPA § 43(d)(2)(A)(ii)(II)(aa), (bb).

79 Banco Inverlat v. www.inverlat.com, 112 F.Supp.2d 521, 523 (E.D. Va. 2000).

80 Id.

81 See, e.g., BroadBridge Media v. Hypercd.com, 106 F.Supp.2d 505, 511 (S.D.N.Y. 2000);Harrods Ltd. v. Sixty Internet Domain Names, 110 F.Supp.2d 420, 425 (E.D. Va. 2000).

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Determining whether a plaintiff has discharged her burden ofshowing a lack of personal jurisdiction “will, of necessity, be factdriven.” Courts thus enjoy a substantial measure of discretion on thismatter. The service of process requirements for in rem jurisdiction listedin subparts (II)(aa) and (bb) are illustrative of this discretion. Service ofprocess may be achieved by:

(aa) sending a notice of the alleged violation and intentto proceed [in rem] to the registrant of the domain nameat the postal and e-mail address provided by theregistrant to the registrar; and (bb) publishing notice of the action as the court maydirect promptly after filing the action.

In Banco Inverlat, the court concluded that it had the discretion to waivethe service by publication requirements under (bb), provided the plaintiffhad successfully contacted the cybersquatter by mail and email. Inessence, the statutory notice obligations may be satisfied once thecybersquatter has actual notice of the in rem suit.

The burden falls squarely on the plaintiff to show the requisitelack of personal jurisdiction in order to proceed in rem. Moreover, suitsbrought in rem require a showing of bad faith coextensive with thatnecessary for personal jurisdiction under the ACPA. As the analysis


82 Amoco Overseas Oil Co. v. Compagnie Nationale Algerienne de Navigation, 605 F.2d648, 655 (2d Cir. 1979).

83 See, e.g., John N. John, Jr., Inc. v. Brahma Petroleum Corporation, 699 F.Supp. 1220,1222 (W.D. La. 1988); Long v. Baldt, 464 F.Supp. 269, 273 (D.S.C. 1979); Papendick v.Bosch, 410 A.2d 148, 152 (Del. 1979); Holt v. Holt, II, 41 N.C.App. 344, 350 (N.C. Ct.App. 1979); Smith v. Lanier, 998 S.W.2d 324, 331 (Tex. App. 1999).

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above indicates, the in rem provisions are quite narrow, and onlyavailable to plaintiffs who would not otherwise have any recourse againstan infringing domain name. These considerations suggest establishing arelaxed minimum contacts standard for in rem suits brought under theACPA.

III. A RELAXED MINIMUM CONTACTS STANDARD FOR IN REM

JURISDICTION SUITS BROUGHT UNDER THE ACPA

A. Stabilizing the Constitutional Status of In Rem Jurisdiction

Despite the paucity of caselaw and the Supreme Court’s dividedopinion in Burnham, a more determinate rule for satisfying due processmay reside in the quasi in rem/in rem distinction propounded by JusticeScalia in Burnham. In Amoco Overseas Oil Co. v. Compagnie NationaleAlgerienne de Navigation, the Second Circuit distinguished its case fromShaffer by noting that contra Shaffer, the property acting as res “isrelated to the matter in controversy.” Several district courts, theSupreme Court of Delaware, and several lower state courts have drawnan identical distinction. However, it would be premature to presumewithout qualification the viability of the distinction.

The court in Amoco emphasized the distinction between quasi inrem and in rem jurisdiction, but effectively blurred the relationshipbetween the two. A suit brought quasi in rem, Amoco involved a tankershipment of oil that plaintiff alleged had not been fully completed. Theshipping contract had been negotiated in the forum state, and the tankerdocked there after its allegedly incomplete shipment. Plaintiff attachedthe tanker and brought suit, naming the tanker as the res. The court


84 Amoco, 605 F.2d at 654 (internal quotation marks omitted).

85 Id.

86 See, e.g., John N. John, Jr., 699 F.Supp. at 1222; Long, 464 F.Supp. at 272; Papendick,410 A.2d at 152; Holt, 41 N.C.App. at 350; Smith, 998 S.W.2d at 331; accord Amoco, 605F.2d at 655. But cf. Porsche Cars North America, Inc. v. Porsche.com, 51 F.Supp.2d 707,712 (E.D. Va. 1999); Sterling Consulting Corp., Inc. v. Indian Motorcycle Trademark, 1997WL 827450, at *1 (D. Colo. Sep. 5, 1997).

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interpreted Shaffer to mean “the test of fair play and substantial justicethat governs in personam jurisdiction controls in rem jurisdiction aswell.” The court concluded that the presence of the property underdispute was sufficient contact, together with the shipping contract, togive rise to personal jurisdiction, and so in rem jurisdiction would beproper. Note that the mere presence of the property, standing alone, wassignificant evidence of minimum contacts, but not enough on its own toconfer jurisdiction. Other courts have concurred with this general rule,sustaining the quasi in rem/in rem distinction and holding that theproperty standing as the res is substantial proof of minimum contacts, butnot necessarily decisive.

At the very least, it appears that the quasi in rem/in remdistinction matters. How it matters is a different question, the answer towhich may reside in the very fact that courts have treated quasi in remand in rem as analytically distinct. This suggests that theconstitutionality of the ACPA’s provisions hinges on the degree ofcontact afforded by the presence of the domain name and whateveradditional contacts, if any, are necessary to establish in rem jurisdiction.These considerations imbue the due process analysis with shades of gray,as it is not at all clear what level of contacts the property, along with anyother dealings with the jurisdiction, supplies. Minimum contacts are, atleast to some extent, built in to all suits brought in rem, since theproperty interest, or domain names more specifically under the ACPA,comprise the core of the dispute. A generic rule might be that the tighterthe relationship between the property and the dispute, the fewer thesecondary contacts, if any, that are needed for establishing in rem


87 Burnham v. Superior Court of California, 495 U.S. 604, 630 (1990) (Brennan, J.,concurring).

88 See Heathmount A.E. Corp. v. Technodome.com, 106 F.Supp.2d 860 (E.D. Va. 2000).

89 See, e.g., Estes v. Midwest Products, 24 F.2d 621, 625 (S.D.W. Va. 1998) (jurisdictionis “wholly dependent on the facts of the individual case” (quoting Perkins v. BenguetConsol. Min. Co., 342 U.S. 437, 445 (1952))).

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jurisdiction. This seems to delineate some middle ground between theolder rule for in rem jurisdiction, which focused on the mere presence ofproperty, and the “contemporary notions of due process” promulgated byJustice Brennan in his Burnham concurrence. The middle ground doesnot, however, map neatly onto the domain name context.

The Heathmount court marginalized the substantiality of thedomain name’s relation to the registrar’s jurisdiction, arguing essentiallythat the contacts which led up to the acquisition of the property were notsubstantial enough to establish personal jurisdiction, and furthermore thatthe registrar’s continuing relationship to the property was minimal. Thisturns the analysis on its head: the Heathmount court objected to personaljurisdic tion in part because the property itself was somehow notsubstantial enough, as opposed to the cybersquatter’s contacts with theforum. The question thus remains: what degree of minimum contactsdoes due process require for domain name disputes brought in rem underthe ACPA, and does the ACPA provide them?

B. In Rem Jurisdiction in the Maritime Context

There is little caselaw available to flesh out the contours ofconstitutionally permissible in rem jurisdiction, and courts readily admitthat the minimum contacts test does not present a bright line rule on thescope of in rem jurisdiction. Rather than try to guess the precise level ofminimum contacts in rem jurisdiction demands, the due process concernraised by the ACPA in rem provisions may be salved by turning to thepolicy considerations that underpin in rem jurisdiction in the maritime


90 Amoco, 605 F.2d at 655. For a discussion of jurisdiction by necessity, see Fraser,Jurisdiction by Necessity--An Analysis of the Mullane Case, 100 U. PA. L. REV. 305 (1951).See also Joseph J. Kalo, The Meaning of Contact and Minimum National Contacts :Reflections on Admiralty In Rem and Quasi In Rem Jurisdiction, 59 TULANE L. REV. 24(1984); Harold S. Lewis, Jr., A Brave New World For Personal Jurisdiction: Flexible TestsUnder Uniform Standards, 37 VAND. L. REV. 1, 61-65 (1984); Arthur T. von Mehren &Donald T. Trautman, Jurisdiction To Adjudicate: A Suggested Analysis, 79 HARV. L. REV.1121, 1173-1174 (1966); Tracy Lee Troutman, Note, Jurisdiction by Necessity: ExaminingOne Proposal for Unbarring the Doors of Our Courts, 21 VAND. J. TRANSNAT’L L. 401(1988).

91 Amoco, 605 F.2d at 654; accord Grand Bahama Petroleum Co., Ltd. v. CanadianTransportation Agencies, Ltd., 450 F.Supp. 447 (W.D. Wash. 1978). But cf. AlyeskaPipeline Service Co. v. Bay Ridge, 509 F.Supp. 1115, 1121-1122 (D. Alaska 1981)(suggesting that Shaffer may apply to maritime law); Merchants National Bank of Mobilev. Dredge General G.L. Gillespie, 663 F.2d 1338 (5th Cir. 1981) (Tate, J., dissenting). Fora general discussion of due process and maritime claims, see Joshua Morse, The ConflictBetween the Supreme Court Admiralty Rules and Sniadichi-Fuentes: A Collision Course?,3 FLA. ST. U. L. REV. 1 (1975).

92 Amoco, 605 F.2d at 655.

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context -- where in rem jurisdiction enjoys a particularly venerabletradition -- and comparing these considerations to similar policiesunderlying the ACPA in rem provisions. Minimum contacts will berevisited in Part III.

The Amoco court drew on two additional factors to distinguishits facts from those of Shaffer, namely the special status of maritimeclaims and “jurisdiction by necessity.” First, Amoco involved a maritimeclaim, a class of disputes afforded special consideration by Article III, §2 of the Constitution and thus sheltered from the full purview of Shaffer.In particular, “the perpetrators of maritime injury are likely to beperipatetic” and thus difficult for courts to exert authority over, whichimplicates a distinct category of policies endemic to the maritimecontext. A policy concern relating to absentee defendants tends to weighin favor of jurisdiction. Second, and closely related, the Amoco courtfound it particularly important that unlike the case before it, “Shafferinvolved an attempt by one domestic state to assert jurisdiction over


93 Id.

94 Shaffer, 433 U.S. at 211 n.37; accord Linda Silberman, Shaffer v. Heitner: The End ofan Era, 53 N.Y.U. L. REV. 33, 76 (1978).

95 Amoco, 605 F.2d at 655; accord Merchants National Bank of Mobile v. Dredge GeneralG.L. Gillespie, 663 F.2d 1338 (5th Cir. 1981).

96 Since we are discussing maritime law, perhaps “cyberpirating,” an oft-used synonym forcybersquatting, is more appropriate.

97 ACPA § 43(d)(1)(B)(VII).

98 See, e.g., Heathmount A.E. Corp. v. Technodome.com, 106 F.Supp.2d 860, 861 (E.D. Va.2000); Banco Inverlat, S.A. v. www.inverlat.com, 112 F.Supp.2d 521, 523 (E.D. Va. 2000).

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defendants who, it appears , could have been sued in at least one otherstate in the United States.” In Shaffer Justice Marshall, writing for themajority, specifically left open "the question whether the presence of adefendant's property in a State is a sufficient basis for jurisdiction whenno other forum is available to the plaintiffs." The Amoco court worriedthat a denial of in rem jurisdiction would leave the plaintiffs withoutrecourse in any U.S. court.

C. Cybersquatting Implicates Policy Concerns Similar to Those thatUnderlie Due Process in Maritime Law Which Support theConstitutionality of the ACPA In Rem Provisions

Cyberpirates keen to the rules of personal jurisdiction canregister anonymously or provide false contact information in theirregistration to avoid suit. Indeed, doing so tends to weigh in favor of badfaith under ACPA. Moreover, not all cyberpirates will be U.S. residents.Cyberpirates may be the internet equivalent of the “peripatetic maritimeperpetrators” over which the Amoco court expressed special concern.Most importantly, the pertinence of the jurisdiction by necessity concernto the in rem provisions contained in the ACPA is manifest. The ACPAprovides for in rem jurisdiction only when personal jurisdiction is


99 See supra text accompanying note 61.

100 This is not to suggest that all domain names are worth $70.00, regardless of how thedomain name has been used. <Sony.com>, for instance, is surely worth far more to Sonythan the registration fee. Consider, however, that the market for infringing domain namesconsists of the trademark owner. It is therefore unlikely that a cybersquatter will investconsiderable resources into the development and promotion of a domain he simply intendsto sell. The value of the infringing domain name to the cybersquatter lies in the fact that itinfringes on a bona fide trademark that is of substantial value to the mark owner, and notbecause of the resources the cybersquatter has expended, or will expend, in developing thedomain name for permissible uses.

101 In Shaffer, Justice Marshall recognized that the jurisdiction by necessity concern couldimpact the due process analysis. See 433 U.S. at 211 n.37.

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unavailable, a requirement to which courts have steadfastly adhered. Inrem jurisdiction can only be used as the last resort, and even then, thescope of punishment is relatively mild, involving the transfer of thedomain name for which the plaintiff paid approximately $70.00. TheACPA in rem provisions are narrowly tailored to function as a last resortfor trademark holders.

Admittedly, there is no constitutional, statutory, or common lawbasis for treating cyberpirates like maritime perpetrators or domainnames like boats. Standing alone, the maritime/domain name analogymay be insufficient to bring the wholesale of ACPA cases within theunique confines of admiralty jurisprudence. However, to the extent thatin rem jurisdiction currently seems to occupy an indeterminate middleground for minimum contacts, the analogy does tend to support theconstitutionality of the ACPA’s in rem provisions. In sharp contrast toboth Shaffer and Burnham, where the defendants were apparently easilyascertainable and highly unlikely to flee the country to avoid suit,cybersquatters may reside overseas or easily register anonymously.Perhaps most significantly, other forums were available to the plaintiffsin Shaffer and Burnham. As I suggested in Part II, an ACPA in rem


102 As one court has noted, “things must be the subject of jurisdiction capable of affectingtheir form, location, possession, existence, etc. It would be abstract justice to determine theinterests of people in things without a jurisdiction capable of effecting such determination.”Chapman v. E. Vande Bunte, 604 F.Supp. 714, 716 (E.D.N.C. 1985).

103 See, e.g., Papendick v. Bosch, 410 A.2d 148,153 (Del. 1979) (finding that jurisdictionby necessity tends to establish jurisdiction according to “basic considerations of fairness”(internal quotation marks omitted)).

104 Intermeat, Inc. v. American Poultry, Inc., 575 F.2d 1017, 1022 (2d Cir. 1978) (internalquotation marks omitted) (discussing International Shoe Co. v. Washington, 326 U.S. 310,316 (1945)).

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action may be a trademark holder’s only recourse against cybersquatters.Finally, extending the jurisdiction by necessity concern beyond themaritime context is not unprecedented.

The “peripatetic” character of cybersquatters and the jurisdictionby necessity concern are powerful reasons for upholding the ACPA inrem provisions, and might be seen as the basis for a relaxed minimumcontacts standard. To the extent that domain name registration "must beviewed as only one contact of the defendant with the state, to beconsidered along with other contacts in deciding whether the assertion ofjurisdiction is consistent with traditional notions of fair play andsubstantial justice,” the constitutionality of the in rem provisions isfurther strengthened by the bad faith requirement, which may have adirect bearing on minimum contacts.

IV. BAD FAITH INTENT TO PROFIT AS MINIMUM CONTACTS

The ACPA provides a non-exhaustive list of factors to aid in thedetermination of what constitutes bad faith:

(I) the trademark or other intellectual propertyrights of the person, if any, in the domain name;

(II) the extent to which the domain nameconsists of the legal name of the person or a name that is


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otherwise commonly used to identify that person;(III) the person’s prior use, if any, of the domain

name in a site accessible under the domain name;(IV) the person’s bona fide noncommercial or

fair use of the mark in a site accessible under the domainname;

(V) the person’s intent to divert consumers fromthe mark owner’s online location to a site accessibleunder the domain name that could harm the goodwillrepresented by the mark, either for commercial gain orwith the intent to tarnish or disparage the mark, bycreating a likelihood of confusion as to the source,sponsorship, affiliation, or endorsement of the site;

(VI) the person’s offer to transfer, sell, orotherwise assign the domain name to the mark owner orany third party, for financial gain without having used,or having intent to use, the domain name in the bona fideoffering of any goods or services, or the person’s priorconduct indicating a pattern of such conduct;

(VII) the person's provision of material andmisleading false contact information when applying forthe registration of the domain name, the person'sintentional failure to maintain accurate contactinformation, or the person's prior conduct indicating apattern of such conduct;

(VIII) the person's registration or acquisition ofmultiple domain names which the person knows areidentical or confusingly similar to marks of others thatare distinctive at the time of registration of such domainnames, or dilutive of famous marks of others that arefamous at the time of registration of such domain names,without regard to the goods or services of the parties;and

(IX) the extent to which the mark incorporatedin the person's domain name registration is or is notdistinctive and famous within the meaning of subsection


105 ACPA § 43(d)(2)(B)(i)(I)-(IX).

106 Id. § 43(d)(1)(B)(emphasis added).

107 Anti-Cybersquatting Consumer Protection Act Report, 140 S. Rep. No. 106-104 (1999),“Balancing cybersquatting deterrence with protected trademark uses.”

108 See, e.g., Sporty’s Farm L.L.C. v. Sportsman’s Market, Inc., 202 F.3d 489, 498 (2d Cir.2000).

109 See, e.g., BroadBridge Media v. Hypercd.com, 106 F.Supp.2d 505, 511(S.D.N.Y. 2000);Harrods Ltd. v. Sixty Internet Domain Names, 110 F.Supp.2d 420, 425-426 (E.D. Va. 2000).

110 Northern Lights Technology, Inc. v. Northern Lights Club, 97 F.Supp.2d 96, 118-119(D. Mass. 2000).

111 For a pre-ACPA argument in favor of expansive in rem jurisdiction over domain names,see Thomas R. Lee, In Rem Jurisdiction in Cyberspace, 75 WASH. L. REV. 97 (2000).Professor Lee’s argument relies substantially on domain name registration as establishingminimum contacts, a position that courts have since rejected. See, e.g., America Online, Inc.v. Huang, 106 F.Supp.2d 848 (E.D. Va. 2000).

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(c)(1) of this section.

The statute vests courts with broad discretion in their inquiry into badfaith, stating that “a court may consider such factors as, but not limitedto,” the indicia listed above. These factors merely “suggest bad-faithintent or lack thereof,” as “the presence or absence of any of these factorsmay not be determinative.” Thus, a court is free to draw on otherconsiderations in its determination of bad faith. However, plaintiffs mustexpressly plead bad faith in order to proceed under the ACPA, regardlessof whether their suit is based on in personam or in rem jurisdiction.Plaintiffs need not, though, “affirmatively prove[] the absence of anyreasonable basis for the Defendant’s use” of the domain name underdispute. In essence, the bad faith requirement fixes attention on theactivities and intentions of the would-be cybersquatter.

A cybersquatter’s bad faith intent to profit could be used to


112 As one court noted, “the utility of a domain name depends in part on the registrar’smeeting its obligations.” America Online, 106 F.Supp.2d at 853. Under this analysis, thedefendant’s cybersquatting activities are “based on a contract which had substantialconnections with that State." McGee v. International Life Ins. Co., 355 U.S. 220, 223(1957). McGee involved a contract dispute between the actual parties to the contract, sodomain name registration is at least partially distinguishable, because the domain namedisputes under the ACPA do not involve the registrar. On the other hand, the generalprinciple behind McGee is that the existence of a contract establishes a “substantialconnection” between the defendant and the forum. Id. at 223. The McGee rule may not,standing alone, bring the ACPA within the ambit of due process. However, as I shall discusslater in this Part, the procedural safeguards discussed earlier, together with the cumulativecontacts derived from the bad faith registration and use, satisfy due process.

113 In one case brought under ACPA, a cybersquatter who had engaged in systematicdomain name registrations with a bad faith intent to profit testified that he “makes between$800,000.00 and $1,000,000.00 per year from his thousands of look-alike names.” Shieldsv. Zuccarini, 2000 WL 1053884, *1 (E.D. Pa. July 18, 2000).

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buttress a showing of minimum contacts. Without a valid andenforceable registration contract, the domain name or names registeredby the cybersquatter are worth little more than the registration fee.Because many cybersquatters have become quite wealthy as a result oftheir illicit registrations, it would be reasonable to conclude thatcybersquatters who engage in the more egregious instances of bad faithintent to profit have purposefully availed themselves of the registrar’sforum, thus satisfying the minimum contacts test. A cybersquatter whohas systematically registered a substantial number of domain names withthe bad faith intent to profit has arguably shown a much greater degree ofminimum contacts than one who merely registers a domain name. Bylatching onto the bad faith requirement in ACPA, courts could furtherrelieve the due process concern.

The first, second, third, fourth, and ninth factors are immaterialto minimum contacts, as these do not seem to involve any substantivec ontact. They focus more on the absence of bad faith rather than on thecybersquatter’s bad faith reaching out to the domain name registrar’s


114 See Brenda R. Sharton, Domain Name Disputes: To Sue or Not to Sue, 44-OCT. B.B.J.10. I include the ninth factor among those that tend to indicate the absence of bad faith,whereas Sharton does not.

115 Burnham v. Superior Court of California, 495 U.S. 604, 636 (1990) (Brennan, J.,concurring).

116 Note that a domain name is not intrinsically an item of intellectual property.

117 See Sporty’s Farm L.L.C. v. Sportsman’s Market, Inc., 202 F.3d 489, 498 (2d Cir. 2000).

118 See id.

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jurisdiction. I therefore discuss these factors briefly in the paragraphbelow. Of the factors outlined by the statute, the fifth, sixth, seventh,and eighth factors bear directly on minimum contacts, as they reveal theextent to which the cybersquatter has invoked the “benefits provided bythe State.”

A. Courts’ Treatment of Bad Faith

Let us turn to the factors that have no bearing on contacts. Thefirst indicia focuses on the intellectual property rights, if any, thecybersquatter may have in the domain name. The second factor inquiresinto the similarity of the domain name, if any, to the cybersquatter’smoniker, with the idea being that if the domain name evokes thecybersquatter’s name, it is plausible that the domain name was registeredand used in good faith and not to piggyback off the holder’s trademark.However, formation of a company corresponding to the disputed domainname nine months after domain name registration may be construedagainst the cybersquatter, even if the domain name embodies part of thecybersquatter’s name. This also may cut against the cybersquatter on thethird factor. The third factor considers an alleged cybersquatter’s prioruse of the domain name. One court construed prior use of the domain


119 Northern Lights Technology, Inc. v. Northern Lights Club, 97 F.Supp.2d 96, 119 (D.Mass. 2000).

120 ACPA § 43(d)(1)(B)(i)(IV). This factor might prove to be sticky, as there may beinstances where the analysis implicates First Amendment free speech considerations. Thedefendant in Morrison & Foerster LLP v. Wick, 94 F.Supp.2d 1125 (D. Colo. 2000), raisedthis issue, arguing that his sites were parodies, and therefore protected by the Firs tAmendment. The court found that the domain names underdispute—<morrisonfoerster.com>, <morrisonandfoerster.com>, <morrisonforester.com>,and <morrisonandforester.com>—were simply too confusing to qualify as parody, pointingout that “a parody depends on a lack of confusion to make its point.” Morrison & Foerster,94 F.Supp.2d at 1134 (emphasis added). By contrast, the defendant in Lucent Technologies,Inc. v. Lucentsucks.com, 95 F.Supp.2d 528, 535 (E.D. Va. 2000), raised a similar contentionregarding the domain name <lucentsucks.com>, arguing that “plaintiff could not make outa violation of trademark rights without infringing the registrant’s free speech.” The courtdismissed the case on jurisdictional grounds, but noted in dicta that this argument “has somemerit.” Id. The court suggested that the domain name <lucentsucks.com> does not createthe likelihood of confusion necessary for “determining whether trademark infringement ordilution has occurred.” Id. The court noted moreover that “[a] successful showing thatlucentsucks.com is effective parody and/or a cite [sic] for critical commentary wouldseriously undermine” an argument that defendants acted with a bad faith intent to profit. Id.See also supra note 26.

121 See Mattel, Inc. v. Schiff, 2000 U.S. Dist. LEXIS 9747, at *13 (S.D.N.Y. July 13, 2000).

122 ACPA § 43(d)(1)(B)(i)(IX).

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name as an email domain name in favor of the cybersquatter. The fourthfactor pertains to the defendant’s “bona fide noncommercial or fair useof the mark.” A commercial use of the domain name under dispute forthe sale of pornography suggests bad faith under the fourth factor. Theninth factor is closely related to the first, but focuses on “the extent towhich the mark incorporated in the person’s domain name registration isor is not distinctive and famous.” The remaining factors inquire into theextent of the cybersquatter’s demonstrated bad faith or, in other words,the extent to which she has reached out to the registrar’s jurisdiction inorder to pursue her cybersquatting.

The fifth factor relates to using the domain name in question to


123 ACPA § 43(d)(1)(B)(i)(V) reads:

[T]he person’s intent to divert consumers from the mark owner’s onlinelocation to a site accessible under the domain name that could harm thegoodwill represented by the mark, either for commercial gain or withthe intent to tarnish or disparage the mark, by creating a likelihood ofconfusion as to the source, sponsorship, affiliation, or endorsement ofthe site.

124 See, e.g., Mattel, 2000 U.S. Dist. LEXIS 9747, at *13-14 (finding that defendant’scommercial use of the domain name <barbiesplaypen.com> to purvey pornography reliedon confusion to divert consumers using Mattel’s trademark “Barbie” and thus contributedto bad faith).

125 ACPA § 43(d)(1)(B)(i)(VI).

126 BroadBridge Media v. Hypercd.com, 106 F.Supp.2d 505, 512 (S.D.N.Y. 2000).

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divert traffic to the cybersquatter’s site. It is trivially true that all domainnames are intended to generate “hits,” so it makes more sense for courtsto consider the likelihood of consumer confusion rather than justdiversion. Diversion, as used in ACPA, seems coextensive withconfusion. The inquiry focuses on whether a consumer seeking thesenior mark is likely to be confused by the cybersquatter’s domain name,and diverted from the senior mark’s site to the cybersquatter’s as a result.In essence, the cybersquatter is using a contract governed by the laws ofthe registrar’s jurisdiction to dilute trademarks. This should be seen ascontributing to a showing of minimum contacts.

The sixth factor relates to cybersquatters who register domainnames to sell at a profit, with no intent to actually use them “in the bonafide offering of any goods or services.” For example, repeated offers to“sell the domain name….for unusually large but diminishing financialgain without ever having used the domain name in connection with anyoffering of any goods or services” is evidence of bad faith. At the sametime, one court ascribed a fairly liberal meaning to what constitutes a“bona fide offering of any goods or services,” finding that the sixthfactor cut in favor of a cybersquatter who “use[d] the domain name as a


127 Mattel, 2000 U.S. Dist. LEXIS 9747, at *15-16 (holding that cybersquatter’s conductsatisfied bad faith requirement, his successful showing on the sixth factor notwithstanding).

128 Id. at *15.

129 Id. at *15-16.

130 See generally International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945).

131 Northern Lights Technology, Inc. v. Northern Lights Club, 97 F.Supp.2d 96, 119 (D.Mass. 2000).

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platform for [his] own seamy sales” of pornography. Moreover, thecybersquatter offered to sell Mattel the disputed domain name only afterbeing served with the complaint. The court interpreted the commercialnature of the defendant’s site as “bona fide” which, together with thedefendant’s initial lack of intent to sell the domain name, tipped the sixthfactor in the defendant’s favor. A strong showing on this factor shouldsubstantially fortify the extent of the cybersquatter’s minimum contacts,as the cybersquatter has turned domain name registration into a businesspursuit that relies on the integrity of the registration contract, therebyinvoking the benefits and privileges of the jurisdiction’s laws.

Should it matter who in fact initiates the offer to sell? So far,courts have not been clear on this point. Although it is probably tooearly in ACPA’s development to declare a jurisdictionalsplit—particularly given the broad discretion that the statute vests injudges for their inquiry into bad faith—courts have applied this factorsomewhat inconsistently. On the one hand, in Northern LightsTechnology, Inc. v. Northern Lights Club, the defendant’s initial refusalto sell the domain name “undermine[d] the allegation of bad faith.”Likewise, the Mattel cybersquatter’s use of the domain name in a bonafide commercial manner, together with his late offer to sell the domainname, was not indicative of bad faith. On the other hand, the court’sreasoning in BroadBridge, an in rem case founded on the allegedcybersquatter’s residence in Canada, seems to suggest that any offer to


132 BroadBridge Media, 106 F.Supp.2d at 511-512.

133 Toeppen had registered hundreds of allegedly infringing trademarks, holding themhostage unless the trademark owners paid him a substantial ransom. See, e.g., PanavisionInt’l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998). Other cybersquatters have beensimilarly prolific. See, e.g., Shields v. Zuccarini, 2000 WL 1053884 (E.D. Pa. July 18,2000); Morrison & Foerster LLP v. Wick, 94 F.Supp.2d 1125 (D. Colo. 2000).

134 BroadBridge Media, 106 F.Supp.2d at 507 (internal quotation marks omitted).

135 Id.

136 Id. at 506-507.

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sell a domain name at a profit, whether or not the defendant initiated thenegotiations, demonstrates bad faith. The degree of contact that thealleged cybersquatter’s conduct in BroadBridge established isquestionable compared to some of the more infamous cybersquatters,such as Dennis Toeppen. The facts of BroadBridge are peculiar, andworth recounting, because the case highlights a possible objection to theuse of bad faith as supplying minimum contacts.

BroadBridge owns the federally-registered trademark“HyperCD,” and registered the domain name <hyperCD.com> for use asan integral part of its services. BroadBridge performs two servicesutilizing this trademark. First, it markets “technology which convertsand compresses analog audio information into digital information andburns this information onto a compact disc.” Second, it allows its clientsto exercise greater control over the content of their CDs by requiring itsclients’ customers to visit <hyperCD.com> and download the softwarenecessary for activating whatever enhanced features may be contained onthe CDs. BroadBridge spent considerable sums of money to these ends,distributing 4.5 million CDs imprinted with the HyperCD trademark andthe domain name <hyperCD.com>. In addition, BroadBridge providedsupport for its clients’ customers using the email address


137 Id. at 507.

138 Id.

139 Id. (internal quotation marks omitted).

140 Id.

141 Id.

142 Id. at 508.

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<[email protected]>. Apparently, BroadBridge forgot to renew itsdomain name, and three weeks after the expiration, Henderson, thealleged cybersquatter, registered the domain name. According to thecourt, Henderson testified that:

As part of his duties [as an employee of CreationTechnologies, Inc.], he was responsible for conceivingproduct names and corresponding Internet domainnames. [His division] was developing a new technologywhich compresses digital audio information as recordedon its own recording equipment and burns thisinformation onto a regular compact disc.

“HyperCD” jumped to his mind, and finding the domain name<hyperCD.com> fallow, he serendipitously registered it. BroadBridgec ontacted him the day after and asked Henderson to transfer the domainname. When Henderson refused, BroadBridge offered to pay the $70registration fee Henderson had expended. Henderson rejected this offer,refused BroadBridge’s next offer of $1000, and told BroadBridge “I saidthat I would be open to a financial compensation in return fortransferring the hypercd.com domain name…I would only be open tothis alternative if any compensation that you offer is in keeping with[what] I consider to be the significant intrinsic value of the name.”Further negotiations, which touched upon purchase prices ranging from


143 Id.

144 Id. at 512.

145 See generally Kenton K. Yee, Location. Location. Location: Internet Addresses asEvolving Property, S. CAL. INTERDISCIPLINARY L.J. 201 (advocating private sale of domainnames to maximize utility).

146 BroadBridge Media, 106 F.Supp.2d at 512.

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$5000 to $85,000 and various rental arrangements, failed to yield asatisfactory resolution, so BroadBridge brought suit. The court foundthat Henderson and his employer “Creation Technologies had never used‘HyperCD’ nor <hyperCD.com> in connection with the promotion orsale of any products or services nor had they spent any moneydeveloping a brand identity.” The court considered this finding,together with the bargaining initiated by BroadBridge, as evidence ofbad faith.

When BroadBridge raised its purchase price from $70 to $1000,one can imagine Henderson’s eyebrows raising. He simply recognizedthe value of the domain name to BroadBridge—despite what the failureto re-register says to the contrary. Sensing either the risk of losing thedomain name via lawsuit or a more profitable use of the domainname—that is, the (re)sale of it to BroadBridge—it arguably madeperfect sense for Creation Technologies to stay the pursuit of a “bonafide” commercial use of the domain name. Nonetheless, the courtcondemned Henderson for “repeatedly offer[ing] to sell the domain nameto plaintiff for unusually large but diminishing financial gain.” But isstarting high and gradually lowering your price until a mutuallysatisfactory price is met not the very essence of negotiations? It seemsmore just to fault Henderson for his exorbitant purchase price demands,including his rejection of BroadBridge’s final offer of $7000, than it is tofault him for merely engaging in negotiations.

At any rate, the court simply ignored BroadBridge’s failure to re-


147 Id.

148 Sporty’s Farm L.L.C. v. Sportsman’s Market, Inc., 202 F.3d 489, 499 (2d Cir. 2000).

149 In addition, the court did not pay much heed to the three-week lag betweenBroadBridge’s domain name expiration, Henderson’s registration, and their subsequentcontacts. This three-week lag raises doubts about the value that BroadBridge placed in thedomain name, for if the domain name was as valuable as BroadBridge suggested, why didit take the company three weeks to catch its mistake?

To be sure, the Heathmount court’s disregard of BroadBridge’s failure to re-register accords with the general rule that mere domain name registration does not establishtrademark rights in the domain name. See Brookfield Communications v. West CoastEntertainment Corp., 174 F.3d 1036 (9th Cir. 1999). However, Heathmount seems to holdthat trademarks embodied in domain names are immune to abandonment as long as theunderlying trademark, independent of its use as a domain name, continues to exist. Forsuggestive, arbitrary, or fanciful trademarks, like the suggestive <hypercd.com> at issue in

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register and concluded that “Henderson’s use of <hypercd.com> wasunquestionably the type of bad faith use Congress intended to prohibit.”The court’s conclusion seems hasty: what is the point of the ACPA iftrademark holders presumptively own all domain names related to theirtrademarks, regardless of the holder’s incompetence and the would-becybersquatters’ good or bad faith? This case seems to stand for theproposition that a trademark holder, whether careless or not, need onlynotify the alleged cybersquatter about her trademark rights, gush abouthow much the domain name is worth, and wait for the cybersquatter’seyebrows to raise in order to establish bad faith.

This may, of course, give Henderson’s testimony too much

credit. After all, both BroadBridge and Creation Technologiesdeveloped audio compression technologies for use in burning CDs, so itmay be fair to impute to Henderson actual knowledge of BroadBridge’strademark—particularly given the 4.5 millions CDs BroadBridge haddistributed containing the HyperCD mark and <hyperCD.com> domainname. One court has found that intent to enter direct competition withthe mark holder using the disputed domain convincingly suggests badfaith. Yet the BroadBridge court did not rely on any such inference orfinding. If these observations are correct, then Henderson’s bad faith is


Heathmount, this makes more sense, as such marks are generally afforded greater protectionunder trademark law. Relatively weaker marks, such as descriptive, geographical, orpersonal name marks, typically correspond to a comparatively broader array of products andservices. See, e.g., Zatarain’s Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786, 790-791(5th Cir. 1983); Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1183 (5th Cir. 1980). In thecase of descriptive marks, for example, registration of a corresponding domain nameeffectively precludes others from using that particular instantiation of the descriptive mark.Given the impossibility of concurrent use of a singe domain name, and the fact thatregistration of a domain name results in a monopoly over use of that domain name, Congressshould consider appending the current three-year abandonment period under Section 45 ofthe Lanham Act with a provision that failure to re-register a domain name establishes apresumption of abandonment with respect to the domain name, independent of thetrademark. Trademark rights outside the domain name context would not be affected.

150 See discussion supra Part III.C.

151 The statute suggests that the court look into the cybersquatter’s “prior conduct indicatinga pattern of such conduct.” ACPA § 43(d)(1)(B)(i)(VI). See supra text accompanying note64.

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not as clear-cut as the court made it out to be. Indeed, all that would beleft standing is BroadBridge’s ownership of the HyperCD trademark, itsextensive prior use of the <hypercd.com> domain name, Henderson’shigh asking price, and Creation Technologies’ corresponding lack of anintellectual property interest in the mark and the domain name. On thesefacts, the cybersquatter’s contacts—his sale negotiations withBroadBridge—may have been insufficient to establish in remjurisdiction, depending on the potency of the earlier argumentanalogizing the policy considerations that underlie in rem jurisdiction inthe maritime context to ACPA, and the degree of minimum contactsneeded more generally for in rem jurisdiction. If the defense of theACPA undertaken herein is to be viable, courts will have to hone theiranalysis of bad faith to ensure that any contacts that arise from bad faithare bona fide.

The sixth factor also suggests a broader inquiry into otherdomain names the cybersquatter may have registered solely to turnaround and hawk off. This broader inquiry has real bite. In Morrison &Foerster, for example, the cybersquatter had never attempted to sell for


152 Morrison & Foerster LLP v. Wick, 94 F.Supp.2d 1125, 1132 (D. Colo. 2000).

153 Id.

154 ACPA § 43(d)(1)(B)(i)(VII).

155 Lucent Technologies, Inc. v. Lucentsucks.com, 95 F.Supp.2d 528 (E.D. Va. 2000). Thecourt in Lucent Technologies rejected in rem jurisdiction on the grounds that although thealleged cybersquatter had forgotten to change his domain name registration address, makingit initially difficult for the plaintiff to notify him, he did leave a forwarding address with thepost office. Plaintiff was thus able to reach him and therefore in rem jurisdiction would beimproper.

156 Mattel, Inc. v. Schiff, 2000 U.S. Dist. LEXIS 9747, at *16-17 (S.D.N.Y. July 13, 2000).

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profit the domain names under dispute, and he further testified that it wasnever his intent to sell them in the future. However, he had registered thedomain name <www.NameIsForSale.com>, from which the courtinferred intent to sell for profit and thus bad faith under the sixth factor.A systematic invocation of the benefits of the registrar’s jurisdiction inorder to make a profit should be evidence of minimum contacts.

The seventh factor considers the alleged cybersquatter’s“provision of material and misleading false contact information whenapplying for the registration of the domain name, the person’s intentionalfailure to maintain accurate contact information, or the person’s priorconduct indicating a pattern of such conduct.” Note that the factorsuggests courts should focus on intentional deceit, as opposed tomistakes. In Lucent Technologies, for example, the defendant hadmerely forgotten to change his registration address when he moved,which the court viewed with sympathy. By contrast, the cybersquatter inMattel deceitfully changed his registration address to one in Costa Ricaafter plaintiffs filed their complaint, ostensibly to escape the court’spersonal jurisdiction and the potential for damages in favor of an in remaction. Defendant’s ploy was unsuccessful, and only added to the court’sstock of arguments for finding bad faith. This factor has particular bitein actions brought in rem, as it speaks to the “ghost cybersquatters” that


157 See id. at *18 (holding that alleged squatting on three domain names “certainly does nothelp” the cybersquatter’s case against bad faith).

158 Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998)(quotingCybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 418 (9th Cir. 1997)).

159 Id.; accord McRae’s, Inc. v. Hussain, 105 F.Supp.2d 594, 598 (S.D. Miss. 2000)(quotingPanavision with approval).

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irked Porsche Cars and motivated the creation of the in rem provisions.This factor mirrors the maritime perpetrator/cyberpirate analogyproposed earlier.

The eighth factor considers any other domain names upon whichthe cybersquatter squats. As few as three domain names have been heldsufficient to tip the eighth factor against the alleged cybersquatter. Thistoo speaks to repeated contacts with the forum, although a weakershowing on this factor should have a corresponding effect on a minimumcontacts analysis.

These factors, standing alone, may in some circumstancesamount to relatively minor contacts. In the aggregate, however, theymay substantially buttress a plaintiff’s case for minimum contacts. Tocite a more extreme example, it would be puzzling if a cybersquatter whoregisters dozens of domain names, sells these domain names at atremendous profit, and thereby relies on a contract between herself andthe registrar, could escape jurisdiction. Moreover, focusing on bad faithintent to profit as supplying minimum contacts is not unprecedented indomain name disputes. In Panavision, the Ninth Circuit determined thatmere domain name registration is not sufficient to establish personaljurisdiction unless there is “something more to demonstrate that thedefendant directed his activity toward the forum state.” The Panavisioncourt found that a cybersquatter’s “scheme to register Panavision’strademarks as his domain names for the purpose of extorting money fromPanavision” constituted “something more.” This cybersquatter’s conductwould certainly satisfy the bad faith requirement in ACPA, given that the


160 Panavision, 141 F.3d at 1318. It is important to note, however, a distinction betweenin rem cybersquatting cases and Panavision. In Panavision, the plaintiff, a Californiaresident, sued the defendant, a resident of Illinois, in California based on the tort principleof effects. However, Panavision does establish that a bad faith intent to profit can contributeto a showing of minimum contacts.

161 See, e.g., Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D.Pa. 1997) (holding that the degree of a web site’s interactivity determines whether personaljurisdiction is available); Anindita Dutta, Note, Zippo Manufacturing Co. v. Zippo Dot Com,Inc., 13 BERKELEY TECH . L.J. 289 (1998). There is a vast catalog of literature on personaljurisdiction in the internet. See, e.g., Dan L. Burk, Jurisdiction in a World Without Borders,1 VA. J. L. & TECH . 3 (1997); Roger J. Johns, Jr. & Anne Keaty, Caught in the Web:Websites and Classic Principles of Long Arm Jurisdiction in Trademark Infringement Cases,10 ALB. L.J. SCI. & TECH . 65 (1999); Christopher M. Kindel, When Digital Contacts EqualMinimum Contacts: How the Fourth Circuit Should Assess Personal Jurisdiction inTrademark Disputes Over internet Domain Names , 78 N.C. L. REV. 2105 (2000); ThomasR. Lee, In Rem Jurisdiction in Cyberspace, 75 WASH . L. REV. 97 (2000) (written prior toenactment of ACPA).

162 See, e.g., Mattel, Inc. v. Schiff, 2000 U.S. Dist. LEXIS 9747 (S.D.N.Y. July 13, 2000)(finding that the defendant infringed plaintiff’s registered trademark “Barbie” under theACPA by defendant’s use of the domain name <barbiesplaypen.com> for a pornographicsite); BroadBridge Media v. Hypercd.com, 106 F.Supp.2d at 505 (finding that the defendantinfringed on plaintiff’s registered trademark “Hypercd” under the ACPA by use of the

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cybersquatter had registered dozens of infringing domain names with theintent to sell them at a profit. Finally, the degree of flexibility thisaffords courts would be in line with the current trajectory of personaljurisdiction in other internet contexts. The procedural safeguardsdiscussed in Parts II and III, together with the indicia of bad faithdiscussed in this Part, support the constitutionality of the provisions.

B. The Scope of Bad Faith Intent to Profit as Minimum Contacts

In addition to fulfilling the bad faith requirement, the plaintiffmust also show that the domain name in question infringes a protectedmark. Yet it is not clear how rigorous a showing the plaintiff must make.So far, most cases that have confronted courts have featured relativelystraightforward trademark analyses, as the marks involved are eitherregistered with the Patent and Trademark Office or indisputably well-known. A case concerning a lesser-known and unregistered trademark


domain name <hypercd.com>).

163 Despite what seems to be a general court suspicion against alleged cybersquatters, somecourts have ruled in favor of alleged cybersquatters, even where the good faith cybersquatterhad registered a federally registered trademark. See, e.g., Avery-Dennison v. Sumpton, 189F.3d 868 (9th Cir. 1999).

164 This sword may prove dual-edged. As international domain name registrars, i.e. onesnot located within the United States, become more commonplace, would-be cybersquattersmay simply register overseas and strip the ACPA in rem provisions of their effect.Accordingly, arbitral proceedings initiated according to the Uniform Dispute ResolutionPolicy (UDRP) of the Internet Corporation for Assigned Names and Number (ICANN) maybe increasingly called upon to settle domain name disputes. The UDRP may be found onICANN’s website: <http://www.icann.org/udrp/udrp-policy-24oct99.htm> (visited Dec. 1,2000). For a case note on the first domain name dispute arbitrated under the ICANN UDRP,together with an overview of how the process works, see M. Scott Donahey & Ryan S.Hilbert, World Wrestling Federation Entertainment, Inc. v. Michael Bosman: A Legal BodySlam for Cybersquatters on the Web, 16 SANTA CLARA COMPUTER & HIGH TECH . L.J. 419(2000). However, some commentators have cautioned that ICANN may frustrate U.S. law.See, e.g., A. Michael Froomkin, Wrong Turn in Cyberspace: Using ICANN to Route Aroundthe APA and the Constitution, 50 DUKE L.J. 17 (2000).

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would certainly complicate the bad faith analysis, because it would betougher for the mark holder to show that the alleged cybersquatteractually intended to profit in bad faith from the mark. Seen in this light,the strength of the holder’s mark will probably come to play a muchmore important role in future cybersquatting litigation. In any event,given the often exorbitant cost of pursuing “traditional” trademarkdilution remedies, the ACPA can be read to provide trademark holderswith a quicker and cheaper alternative. The tremendous amount ofleeway given to courts in their inquiry into bad faith, together with whatseems to be a generally suspicious sentiment towards allegedcybersquatters on the part of courts, provides bona fide trademarkholders with substantial leverage in the maintenance of their trademarks.

For many, my argument will be unsatisfactory, as it expandsupon the already wide latitude courts enjoy under ACPA. In Burnham,Justice Scalia criticized the concurrence’s understanding of due processbecause “it measures state-court jurisdiction not only against traditional


165 Burnham v. Superior Court of California, 495 U.S. 604, 623 (1990).

166 See, e.g., Morrison & Foerster LLP v. Wick, 94 F.Supp.2d 1125 (D. Colo. 2000)(holding that plaintiff who had registered domain names such as <morrisonfoerster.com>and <morrisonandfoerster.com> had exhibited bad faith).

167 See, e.g., Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998

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doctrines in this country, including current state-court practice, but alsoagainst each Justice’s subjective assessment of what is fair and just,” anapproach imbued with “subjectivity” and therefore “inadequa[te].” Inthe context of domain name disputes, Justice Scalia’s concern may beparticularly poignant. Notwithstanding their broad discretion in the badfaith inquiry, courts have analyzed it more or less according to thefactors laid out by the ACPA without too many surprising results, asmost cybersquatters to date have been less than subtle in their activitiesand aims. It is reasonable to assume that the number of domain namedisputes involving relatively clear-cut examples of trademarkinfringement and bad faith—cases involving high profile trademarks andnames with intrinsic value—will decline over time, as the internetcontinues to move into the mainstream and mark holders become moresavvy in the maintenance of their trademarks and corresponding domainnames. In other words, bad faith will become much more difficult toevaluate, which could result in a corresponding decline in the efficacy ofusing bad faith as supplying minimum contacts. Nevertheless, thejurisdiction by necessity outlined in Amoco, together with the analogybetween maritime perpetrators and cybersquatters, provides courts with avery lucid starting point for their analysis and thereby mitigates thesubjectivity inherent in using bad faith as evidence of minimum contacts.Moreover, my suggestion of focusing on bad faith as evidence ofminimum contacts has the potent advantage of using indicia that arealready built-in to the plaintiff’s pleading and the court’s analysis.

ACPA caselaw reveals wide disparities in the degree of bad faithexhibited by the cybersquatter. On the one hand, there is DennisToeppen, a notorious and quite prolific cybersquatter. On the other


168 The in rem provisions in the ACPA seem to grant U.S. courts jurisdiction over alldomain names, regardless of the nationality of the parties involved. For example,Heathmount A.E. Corp. v. Technodome.com, 106 F.Supp.2d 860 (E.D. Va. 2000), involveda dispute between two Canadian citizens! For thoughtful discussions of the internet andnational sovereignty, see BORDERS IN CYBERSPACE (Brian Kahin & Charles Nesson eds.,1997); Joel P. Trachtman, Cyberspace, Sovereignty, Jurisdiction, and Modernism, 5 IND. J.GLOBAL LEGAL STUD. 561 (1998); Jeffrey J. Look, The Virtual Wild, Wild, West (WWW):Intellectual Property Issues in Cyberspace—Trademarks, Service Marks, Copyrights, andDomain Names, 22 U. ARK. LITTLE ROCK L. REV. 49, 84 (1999). For a case that frames thejurisdictional analysis for Lanham Act violations that involve international infringers andin rem jurisdiction, see Sterling Consulting Corp. Inc. v. Indian Motorcycle Trademark,1997 U.S. Dist. LEXIS 21301 (D. Colo. Sep. 5, 1997). For more on jurisdiction moregenerally, see Dan L. Burk, Jurisdiction in a World Without Borders, 1 VA. J.L. & TECH . 3(1997). For commentary on the internet’s impact on international law, see Henry H. Perritt,

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hand, there is BroadBridge, where bad faith, as Part IV suggested, wasnot so clear. This case stands for the proposition that there may verywell be cases where a cybersquatter’s bad faith may be relativelyattenuated. Whether or not in rem jurisdiction is constitutional in theseless straightforward cases implicates once again the degree of minimumcontacts required. However, the procedural safeguards contained inACPA, particularly the notion of jurisdiction by necessity, providepowerful arguments for upholding constitutionality, perhaps even inthose cases that straddle the margin. However, if the suggestion that badfaith will become more difficult to establish is correct, it may bereasonable to assume that plaintiffs will turn again to the more traditionaltrademark dilution suit in lieu of the ACPA, with the concomitant effectthat in cases brought in rem, plaintiffs will be hypervigilant on the matterof bad faith in their pleadings. The key point is this: ACPA’s in remprovisions are available exclusively as a last resort, and even then theconsequences that might stem from an adverse judgment are relativelybenign.

CONCLUSION

The scale of the problems surrounding domain name disputesand internet jurisdiction more generally is apparent. Indeed, this paperdoes not even touch upon the broader international policy concernsimplicated by the in rem provisions. The Anti-Cybersquatting Consumer


Jr., The Internet is Changing International Law, 73 CHI.-KENT L. REV. 997 (1998).

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Protection Act, insofar as it provides courts with a structured analysis forcybersquatting cases, is an important step in the development of domainname dispute jurisprudence and internet jurisdiction. Adopting a relaxedminimum contacts standard for in rem jurisdiction, a position supportedby caselaw and the procedural safeguards built into ACPA, together withincorporating the cybersquatter’s degree of bad faith into thejurisdictional analysis, would place the statute on more firm ground.

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